OECD Sets Global Standard for Automated Tax Information Exchange

The Organization for Economic Cooperation and Development said Thursday it created a worldwide standard through which countries and jurisdictions can automatically furnish tax information with each other, so authorities can find people cheating on their taxes.

Bloomberg News

Pedestrians are reflected in a glass window displaying currency symbols at a Shinhan Bank branch in Seoul on Feb. 6, 2014.

Sparked by a mandate from the Group of 20 countries, and inspired in part by the U.S. Foreign Account Tax Compliance Act, or FATCA, the OECD will present the global standard to the G-20 finance ministers when they meet later this month in Sydney.

“Globalization of the world’s financial system has made it increasingly simple for people to make, hold and manage investments outside their country of residence,” said Angel Gurría, secretary general of the OECD, in a statement. “This new standard on automatic exchange of information will ramp up international tax co-operation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion.”

The new standard would require countries signing up to the agreement to notify another signatory country, on an annual basis, if its banks and other financial institutions have accounts held under the name of that country’s citizens or companies. It consists of two components: CRS, which contains the reporting and due diligence rules; and CAA, which contains the detailed rules on the exchange of information.

“Automatic exchange of tax and financial information is essential to combating global tax evasion and money laundering,” said Heather Lowe, the legal counsel and director of government affairs for Washington D.C.-based nonprofit Global Financial Integrity, in a statement. “Developing and middle income countries must be able to participate in the system as well if it is to be truly effective.”

Financial institutions implementing the standard face the burden of having to come up with information on their accountholders they previously didn’t have to report or maintain, noted John Harrington, a partner in the Dentons tax practice, in an interview. But with FATCA compliance — implemented through individual agreements with the U.S. — knocking on the door, they were already going to have to collect much of this information anyway, he said.

“To a certain extent, creating common standards…is intended to reduce the burden,” said Mr. Harrington. “It’s a lot less work than answering to many different tax authorities.”

Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld.

Comments (2 of 2)

“When governments fear the people, there is liberty. When the people fear the government, there is tyranny.” -Thomas Jefferson

In the New America, we “U.S. persons” live in a progressive economic tyranny. Example? Try withdrawing more than ten thousand of your own dollars in cash from your own banking account. Try opening a foreign banking account.

Yes, tyranny can be economic as well as political. Ultimately, however, economic tyranny leads to political tyranny.

As a consequence of the Sixteenth Amendment, we Americans lost economic liberty in our personal finances with the subsequent creation of the Internal Revenue Service. Then, we lost economic liberty in our banking finances with the loss of banking privacy (aka/”banking secrecy”).

Most Americans have good reason to fear their own government; they don’t. Why? Because they don’t pay federal taxes and/or they rely upon stealing other people’s money via a tyrannical government redistributing wealth. The quid pro quo? Loss of liberty. Civil servants with citizens their masters have become civil masters with citizens their servants.

If, as appears the case, America is fragmenting economically, politically, and socially, eventually we may get a chance to rebuild her along the lines of a revised, sound constitution; traditional American ideals and values; and science. Despite the Obamas, Reids, and Boehners, it can be done (www.inescapableconsequences.com).

3:30 am February 14, 2014

taxme wrote:

Just yesterday I watched a construction worker who was working nearby sort a huuuuge stack of cash in his lap as he sat in his pickup (in plain view, parked on the street). His worker got in and the two fought over the handful of cash #1 wanted to offer #2. It went on for at least two minutes. Neither Mexico nor the USA will see a penny of tax on that cache. (It was like something from a Bruce Willis or Michael Caine comedy.)

Under the ASU, inventory is “measured at the lower of cost and net realizable value,” which eliminates the need to determine replacement cost and evaluate whether it is above the ceiling net realizable value or below the floor. The FASB did not amend other guidance on measuring inventory, such as the LIFO, FIFO and average cost method. In addition to reducing complexity, the proposal would make U.S. GAAP more comparable to IFRS.

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